BSP Set to Pilot Wholesale Central Bank Digital Currency Project

BSP Set to Pilot Wholesale Central Bank Digital Currency Project

by April 28, 2022

The Bangko Sentral ng Pilipinas (BSP) announced that it has decided to pursue the pilot project of a wholesale central bank digital currency (CBDC) as part of its efforts to promote the stability of the country’s payment system.

Dubbed Project CBDCPh, the pilot will test the use of CBDCs for large-value financial transactions on a 24/7 basis across a limited number of financial institutions.

In contrast to general purpose or retail CBDC intended for use of the general public, a wholesale CBDC is restricted mainly to banks and other financial institutions.

BSP’s Governor Benjamin E. Diokno said that a wholesale CBDC may contribute to addressing frictions on large cross-border foreign currency transfers, settlement risk exposure from using commercial bank money in equities, and operating an intraday liquidity facility.

Project CBDCPH is led by an intersectoral project management team to ensure coverage of critical operational areas.

These include policy and regulatory considerations, technological infrastructure, governance and organisational requirements, legal matters, payment and settlement models, reconciliation procedures, and risk management.

The BSP is exploring the potential use of wholesale CBDCs in areas where these can yield the greatest value-adding benefits to the payment system.

Benjamin Diokno

Benjamin E. Diokno

“Learnings from the pilot will be critical in constructing the BSP’s medium- to long-term roadmap for more advanced wholesale CBDC projects that shall further strengthen the Philippine payment system,”

the Governor explained.